Brown & Brown, Inc. (NYSE:BRO) Earnings Preview: A Look into the Insurance Brokerage's Financial Health

Brown & Brown, Inc. (NYSE:BRO) is a prominent player in the insurance brokerage industry, providing a wide range of insurance products and services to both individuals and businesses. Operating within the Zacks Insurance - Brokerage industry, Brown & Brown has demonstrated strong performance and growth, competing with other major insurance brokers to maintain its position through consistent financial achievements.

On January 27, 2025, Brown & Brown reported earnings per share (EPS) of $0.86, surpassing the estimated $0.767. This performance reflects a significant improvement from the $0.58 per share reported in the same quarter last year. The earnings surprise for this quarter stands at 14.67%, as highlighted by Zacks. In the previous quarter, the company also exceeded expectations with earnings of $0.91 per share against an anticipated $0.87, reflecting a 4.60% surprise.

In terms of revenue, Brown & Brown achieved approximately $1.18 billion, exceeding the estimated $1.12 billion. This represents a notable increase from the $1.03 billion in revenue reported in the same period the previous year. The company has consistently surpassed consensus revenue estimates in each of the last four quarters, demonstrating its ability to generate growth. The 15.4% increase in total revenues for the fourth quarter was driven by a rise in commissions and fees, alongside a 13.8% increase in organic revenue.

Despite the revenue growth, income before income taxes fell by 22.8% to $275 million, with the margin decreasing to 23.2% from 34.7%. This decline was attributed to a gain from the sale of certain third-party claims administration and adjusting services businesses in the fourth quarter of 2023. However, the company's EBITDAC - Adjusted rose by 22.6% to $390 million, with the EBITDAC Margin - Adjusted improving to 32.9% from 31.0%.

Brown & Brown's financial metrics provide insight into its market valuation and financial health. The company has a price-to-earnings (P/E) ratio of approximately 29.97, indicating how much investors are willing to pay per dollar of earnings. Its price-to-sales ratio stands at about 6.26, reflecting the market's valuation of the company's revenue. The debt-to-equity ratio is relatively low at 0.064, indicating a conservative use of debt in the company's capital structure. The current ratio is 1.10, suggesting a positive indicator of short-term financial health.

• Brown & Brown, Inc. (NYSE:BRO) reported an EPS of $0.91, exceeding the estimated $0.881 and the Zacks Consensus Estimate of $0.87.
• The company's total revenues reached approximately $1.19 billion, surpassing the estimated $1.16 billion and indicating an 11% increase year-over-year.
• Brown & Brown's financial health is highlighted by a debt-to-equity ratio of 0.69 and a current ratio of about 1.13, showcasing its financial stability.

Brown & Brown, Inc. (NYSE:BRO) is a prominent player in the insurance brokerage industry. The company provides a wide range of insurance products and services, catering to both individuals and businesses. It competes with other major firms in the sector, such as Marsh & McLennan and Aon. Brown & Brown's recent financial performance highlights its strong market position and growth trajectory.

On October 28, 2024, Brown & Brown reported earnings per share (EPS) of $0.91, surpassing the estimated $0.881. This achievement also exceeded the Zacks Consensus Estimate of $0.87 per share, as highlighted by GlobeNewsWire. The company's EPS showed a significant improvement from the previous year's $0.71, indicating robust growth in profitability.

The company reported total revenues of approximately $1.19 billion, exceeding the estimated $1.16 billion. This figure aligns closely with the reported $1.2 billion, marking an 11% increase compared to the previous period. Brown & Brown's organic revenue growth of 9.5% further underscores its ability to expand its business operations effectively.

Brown & Brown's financial metrics provide insight into its market valuation. The company has a price-to-earnings (P/E) ratio of approximately 29.30, reflecting the market's confidence in its earnings potential. Its price-to-sales ratio of about 6.51 and enterprise value to sales ratio of 6.81 indicate how the market values its revenue and overall worth.

The company's financial health is supported by a debt-to-equity ratio of approximately 0.69, suggesting a moderate level of debt relative to equity. Additionally, a current ratio of about 1.13 indicates Brown & Brown's ability to cover short-term liabilities with its short-term assets, showcasing its financial stability.

• RBC Capital upgrades Brown & Brown, Inc. (NYSE:BRO) to Outperform from Hold and increases the price target to $110 from $95.
• The upgrade reflects strong confidence in Brown & Brown's future market performance, with the stock price at the time being $97.56.
• Brown & Brown's significant growth trajectory is supported by a strong market capitalization of around $27.83 billion and robust investor interest.

On Wednesday, July 24, 2024, RBC Capital upgraded Brown & Brown, Inc. (NYSE:BRO), a leading insurance brokerage firm, to Outperform while previously maintaining a hold action. This significant upgrade came with an increase in the price target to $110 from $95, as reported by TheFly. This adjustment by RBC Capital indicates a strong confidence in Brown & Brown's future market performance, especially considering the stock's price at the time was $97.56.

Brown & Brown, Inc. has been a notable player in the insurance sector, providing a range of insurance and reinsurance products and services. The company's performance, especially in the second quarter of 2024, has evidently caught the attention of financial analysts and institutions, including RBC Capital. During its second quarter earnings call, key figures such as President and CEO Powell Brown and EVP, CFO, and Treasurer Andy Watts highlighted the company's financial achievements and operational progress. This event was closely followed by financial analysts from prestigious institutions, underscoring the financial community's keen interest in Brown & Brown's business trajectory.

The stock's performance on the NYSE, with a slight decrease of $0.49 or about -0.50% to $97.56, reflects the market's immediate reaction to the company's financial disclosures and RBC Capital's upgrade. Despite this minor fluctuation, Brown & Brown's stock has shown significant growth over the past year, trading as low as $66.73 and reaching highs of $99.08. This growth trajectory is supported by the company's strong market capitalization of around $27.83 billion and a trading volume of 1,733,652 shares, indicating robust investor interest and confidence in the firm's market value and financial health.

RBC Capital's upgraded outlook and revised price target for Brown & Brown are based on a comprehensive analysis of the company's operational efficiency, market position, and financial performance. The positive adjustment reflects an anticipation of continued growth and success for Brown & Brown in the insurance industry, setting a bullish tone for the company's stock in the eyes of investors and market analysts alike. This upgrade, following closely after the company's second quarter earnings call, suggests that Brown & Brown is on a solid path to achieving and possibly exceeding its financial and operational goals, making it a noteworthy stock for investors to watch.

On Monday, April 22, 2024, before the market opened, BRO:NYSE reported earnings per share (EPS) of $1.04, which was slightly below the estimated $1.07. However, the company's revenue for the period stood at approximately $1.26 billion, surpassing the estimated revenue of about $1.22 billion. This performance is a testament to Brown & Brown's ability to exceed market expectations, particularly in terms of revenue generation. The company's financial health is further underscored by its strong organic growth and improved EBITDAC margin, as highlighted by Zacks Investment Research. This combination of factors suggests that BRO is on a positive trajectory, with a robust operational efficiency that could potentially favor its stock price performance in the future.

The detailed financial metrics provided by Brown & Brown, Inc. (BRO) for the first quarter of 2024 reveal a company in strong financial standing. With total revenues reaching $1.258 billion, marking a significant year-over-year increase of 12.7%, BRO demonstrates its capacity for growth. This increase is supported by an 11.6% rise in commissions and fees and an 8.6% increase in Organic Revenue, indicating a diversified and expanding revenue base. The company's income before income taxes also saw a substantial rise of 23.8%, reaching $364 million, with the Income Before Income Taxes Margin improving to 28.9% from 26.3%. These figures not only highlight the company's ability to generate profit but also its efficiency in managing its operations to improve profitability margins.

Furthermore, Brown & Brown's adjusted EBITDAC grew by 17.1% to $466 million, with the Adjusted EBITDAC Margin expanding to 37.0% from 35.7%. This growth in EBITDAC, a measure of a company's operating performance, indicates that BRO is effectively controlling its costs and optimizing its operational processes. The net income for the quarter stood at $293 million, a 24.2% increase, which translates to a diluted net income per share of $1.02, up by 22.9%. This increase in net income and earnings per share reflects the company's strong profitability and its ability to deliver value to its shareholders.

In terms of valuation metrics, Brown & Brown, Inc. (BRO) exhibits a price-to-earnings (P/E) ratio of approximately 24.86, indicating the market's willingness to pay for its earnings. The company's price-to-sales (P/S) ratio stands at about 5.33, reflecting the value placed on each dollar of BRO's sales. With an enterprise value to sales (EV/Sales) ratio of roughly 6.12, it suggests the market's valuation of the company in relation to its sales, taking into account its debt and cash levels. These valuation ratios, along with the company's earnings yield of about 4.02% and a debt-to-equity (D/E) ratio of around 0.70, provide a comprehensive view of BRO's financial health and market valuation. The current ratio of approximately 1.03 further indicates the company's ability to cover its short-term liabilities with its short-term assets, underscoring its financial stability.